The Best Holiday Gift? A Plan for Your Financial Well-Being

It’s the most generous time of the year, when celebrations, gift-giving and charitable contributions are on the minds of most Americans. For the next few weeks, we’ll see crowded malls, a cascade of online purchases, and presents piling up under Christmas trees everywhere.

Then comes January. That’s when many of us shift our thinking – from the excitement of the holidays to the very real sticker shock of credit card bills. No wonder so many people resolve to get their finances under control in the New Year!

This Christmas, I invite you to think differently, and choose a gift that lets you strike at least one New Year’s resolution off your list: Give yourself and your family the gift of financial well-being, with a plan that will help you achieve a comfortable retirement, a lifestyle you love, or long-term financial security. Bah, humbug you say? Not so fast. Consider this:

As I wrote this summer, a FINRA Foundation study showed that nearly half of Michigan residents still don’t have a rainy-day fund that would cover three months of expenses in the event of an emergency. More than a quarter of Michiganders reported spending more than they saved, or more than their household income (not including major purchases, like a home or car).

Better Investment Experience

And think about this as you pull out your credit card to buy that big-screen TV this year: Nearly a third of Michigan residents paid only the minimum on their credit cards last year. That probably means: 1) they’re still paying for last year’s gifts, 2) those gifts are costing way more than they thought they were saving on Black Friday in 2015, and 3) they’re hurting their chances to save for the future. When that TV finally breaks, will it even be paid for?

By working with an adviser to create financial plan instead, you could be making these strides toward your long-term financial well-being:

  • Catching up on your retirement savings. If you’re over 50, you can contribute more to your employer-sponsored retirement plan to make up for lost time. If you contribute more now, you’ll lower your income and pay fewer taxes for 2016! A qualified financial adviser can show you how to integrate tax, financial and investment strategies to achieve your goals.

  • Mitigating risk by having appropriate insurance. Do you have enough (or too much) life insurance to protect your loved ones in the event of your death? Do you have the right kind of insurance? For example, are you paying expensive premiums for a whole-life policy when term insurance might be a better fit?

  • Paying down debt. If your student loans or credit card debt are overwhelming, it’s time to develop a strategy that lets you reduce debt while still managing to save. An adviser can help you create a budget to help you live within your means.

  • Building an emergency fund. Next year, when the car breaks down or the roof springs a leak, wouldn’t it be nice to pay for the repair without dipping into your savings? Your adviser can show you how saving for a rainy day can lead to a deep, relaxing breath instead of hyperventilation when an unexpected problem occurs!

If you’re worried about how to choose a financial adviser who will place your interests first, we can help. We invite you to contact us for a free consultation, or even a second opinion if you have questions about your current plan. AMDG Financial is a fee-only, fiduciary Registered Investment Adviser, and we’re committed to helping our clients become good stewards of their money.

The holidays are here – don’t wait until January to make the ultimate holiday “plan!”

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